ROME (AP) — Italy entered into days of political and financial uncertainty Friday as Premier Mario Draghi weighed his options and political leaders calculated theirs after populist ally the 5-Star Movement sparked a crisis by withholding support on a government-sponsored bill.
On the immediate horizon are behind-the-scenes consultations through mid-week to see if Draghi still commands enough support to govern — which the Italian president and key parties clearly want — or preparations for an early election as soon as September.
Milan’s FTSE Mib was trading 1.12% higher Friday though the spread on Italian debt verses the benchmark German bund widened to 227 points, up from Thursday’s close of 203.
Draghi immediately offered to resign Thursday after 5-Star senators boycotted a vote on helping Italians cope with rising energy prices, arguing that the conditions that created his government of national unity, which included parties on the right, left and the 5-Stars, no longer exist. But President Sergio Mattarella rejected his offer and told Draghi to go back to Parliament on Wednesday to see if he still had the support to govern.
The turmoil couldn’t have come at a worse time for the eurozone’s third-largest economy. Italy is facing soaring inflation and energy costs as a result of Russia’s war in Ukraine, a prolonged drought that is threatening crops in the country’s most productive regions and the ongoing implementation of its EU-financed program to recover economically from the coronavirus pandemic.
While Draghi might still have the numbers and the support of key allies to continue leading the government, some on the right are already gunning for an early election.
Meloni’s usual center-right allies — the Forza Italia party of ex-Premier Silvio Berlusconi and the League led by Matteo Salvini — indicated more of a wait-and-see approach. In a joint statement Friday, they backed Draghi for what they said was his understandable ire and blasted the 5-Stars for having created a national crisis over their opposition to a new garbage incinerator for Rome.
Friday thus opened days of back-room discussions among party leaders to decide what position to take on Wednesday if a new confidence vote is put before Parliament. Already, there were reports that the 5-Stars could vote in favor of a revamped Draghi program, but it’s not at all clear that other coalition parties would want them back in the ruling coalition.